Bandhan Bank shares fell sharply, breaching the 10% lower circuit and sliding over 13%, marking the steepest single day fall since March 2020. The drop followed a cautious update in its Q4 FY27 concall, where return on assets guidance was cut to 1.2% to 1.4% from the earlier 1.6% to 1.8% aspiration.
The revision was linked mainly to external pressures. Rising funding costs, higher technology expenses, geopolitical tensions in the Middle East and uncertain monsoon patterns were cited as key hurdles. The 40 basis point cut reflects a 30 bps hit on net interest margins and a 10 bps stretch on operating expenses. Credit cost guidance remains steady at 1.6% to 1.8%.
Despite the downgrade, Bandhan Bank maintained its medium term goal of achieving the earlier ROA target, though the timeline may be extended. Improvement is expected from higher other income contributions of 10% to 20% bps and marginal gains in credit costs. Net interest margins are projected to stay broadly stable at 6.2%, limited by funding cost pressures.
The sharp fall highlights investor concerns over profitability headwinds even as the bank expressed confidence in its long term trajectory.
